Partnership: Top 10 Issues
Translation of the article: Important Questions Startup Co-Founders Should Ask Each Other .
How will the revenue be shared?
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In fact, the question is who will have what percentage of the profits. This is one of the most difficult questions (and, by the way, the answer is “equally between the creators”).
How will decisions be made?
Often, the degree of a person’s influence on decisions depends on his share (which should have been divided in the previous paragraph), but not necessarily. Solutions most often relate to the organization of the company, personnel management, budget allocation, etc.
What happens if one of the partners leaves?
It is certainly worth discussing in advance so that later there would be no endless disputes and mutual claims. The company least needed a founder who has already pulled away from business, but still shakes the air around.
Can someone fire one of us? On what basis?
Yes, even the founder of the company can be fired. Many people confuse the concept of a co-owner and a person who really works on the development of a company. The co-owner does not have to take part in the life of the company. And this should be discussed in advance.
What are our personal goals in the company?
Goals may change over time, but you still need to describe the initial goals of each partner. If one of the partners wants to build a powerful stable business, and the other wants to achieve sustainable growth and flexibility, then it is desirable to discuss it in advance.
What are the main responsibilities of each?
A huge number of partnerships suffers from the fact that partners do not have a clear understanding of who is responsible for what and how much work they do. Can one of the partners also engage in third-party business?
What specifically in our plan we do not want to change?
Plans often change. But there are always elements that remain unchanged.
Legal details
Will the partners, in addition to the agreement on the distribution of shares, also have a contract with the company being created? If yes, then it is worth discussing its conditions.
Investments and their return
Will partners invest cash in the newly created company? If so, then in what form: interest-free loan, loan? Will the partner's share increase due to his investment?
What to pay yourself? Who can fix this?
How to get income? Who can change the conditions for obtaining income and the distribution of shares: a particular person or all together?
From myself I will add:
Exit strategy
It must be clearly stated how one of the partners can leave the general business for any reason.
How will the revenue be shared?
')
In fact, the question is who will have what percentage of the profits. This is one of the most difficult questions (and, by the way, the answer is “equally between the creators”).
How will decisions be made?
Often, the degree of a person’s influence on decisions depends on his share (which should have been divided in the previous paragraph), but not necessarily. Solutions most often relate to the organization of the company, personnel management, budget allocation, etc.
What happens if one of the partners leaves?
It is certainly worth discussing in advance so that later there would be no endless disputes and mutual claims. The company least needed a founder who has already pulled away from business, but still shakes the air around.
Can someone fire one of us? On what basis?
Yes, even the founder of the company can be fired. Many people confuse the concept of a co-owner and a person who really works on the development of a company. The co-owner does not have to take part in the life of the company. And this should be discussed in advance.
What are our personal goals in the company?
Goals may change over time, but you still need to describe the initial goals of each partner. If one of the partners wants to build a powerful stable business, and the other wants to achieve sustainable growth and flexibility, then it is desirable to discuss it in advance.
What are the main responsibilities of each?
A huge number of partnerships suffers from the fact that partners do not have a clear understanding of who is responsible for what and how much work they do. Can one of the partners also engage in third-party business?
What specifically in our plan we do not want to change?
Plans often change. But there are always elements that remain unchanged.
Legal details
Will the partners, in addition to the agreement on the distribution of shares, also have a contract with the company being created? If yes, then it is worth discussing its conditions.
Investments and their return
Will partners invest cash in the newly created company? If so, then in what form: interest-free loan, loan? Will the partner's share increase due to his investment?
What to pay yourself? Who can fix this?
How to get income? Who can change the conditions for obtaining income and the distribution of shares: a particular person or all together?
From myself I will add:
Exit strategy
It must be clearly stated how one of the partners can leave the general business for any reason.
Source: https://habr.com/ru/post/16759/
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